ECB Case for Raising Bank Reserves
- Impact of cut in remuneration is minimal, Commerzbank says
- Central bank may increase minimum reserve requirement to 2%
This article is for subscribers only.
The European Central Bank looks increasingly likely to raise reserve requirements for lenders this year as steps taken to prepare for the move have done little to disturb money markets, according to strategists at Commerzbank AG.
The ECB’s decision to stop paying interest on minimum cash reserves has only led to a modest increase in volatility in the euro’s overnight benchmark rate, strategists including Christoph Rieger wrote in a note, and may give the ECB confidence to push on with a wholesale increase in required reserves.